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Suppose that rising world oil prices reduce short run aggregate supply in an oil

Suppose that rising world oil prices reduce short-run aggregate supply in an oil-importing country and push the economy into a recession. Which of the following might bean effective fiscal policy that the government can implement inorder to bring the economy back to potential output?

I. Increase the amount of printed currency in circulation


II. Cut taxes for households around the country


III. Increase funding to build public highways


IV. Lower the prices of all other goods and services

(A) I and IV

(B) II and III

(C) I and III

(D) II and IV

Apr 26 2018 Read more Less More

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